Rural agri laborers as customer group of digital banks in Singapore
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Rural agri laborers as customer group of digital banks in Singapore
- 1. Rural Agri-Laborers Debt profile – Thai farmers Farming and Agricultural operations employ 40% of Thailand’s 33 Million person workforce, with an estimated contribution of 10% to the national GDP. Majority of the farms are family-run and smaller in scale, making it difficult for them to secure financing for their operations. Context: A financial institution was looking to implement a payment solution for one of its major clients, a farming corporation with over 100,000 independent farmers and 154 buying centers. Farmers would come to these buying centers to sell their produce, and in return given cash. However this proved to be problematic as on occasion, over €120,000 was being transferred daily, leading to the potential of robbery, staff misappropriation of money, and the added logistics of depositing large amounts of cash into bank accounts daily. Opportunities: Thailand’s agricultural export accounts for 8.4% of her GDP which amounts to USD 38.2 billion. Applicable solution: • Implement a web based system that allows produce to be weighed, and then processing payments to vendor accounts upon completion. • Automate most of the sale process, by only requiring personnel to spot check products for quality control before automatically weighing. These farms rely on outdated methods of recording transactions and contracts. Payments One-stop mobile solution that records terms of contract and automates payments. Digital ledger that records transactions and contracts to build trust between buyers and sellers. Insurance A financial product that allows agri- laborers to insure the most valuable portions of their crops, hedging the risk of a potential poor harvest and minimize losses. Rising need for crop insurance given the wider variability in crop yield. Financing A growing segment of agri-laborers need flexible loan arrangements for seasonal fluctuations in crop produce. Implement a solution that allows agri- laborers to instantly withdraw funds as needed as opposed to a lump sum loan. B$338 Billion Average amount borrowed by loansharks in a year to finance farm operations and higher entry costs. Accumulated debt for a rural-agri farmers, due to high interest rate. Estimated increase in average annual income by 2037, stipulated in the government’s “Thailand 4.0” economic model. B$21.59 Billion 700% Client impact: • Able to generate a credit score using historical earnings of farmers, which can be utilized should they wish to apply for a bank loan. • Increase bank efficiency by reducing the amount of cash the bank counts and handles each day. Varun Mittal EY Global Emerging Markets FinTech lead varun.mittal@sg.ey.com FinTech Hub www.ey.com/sg/FinTechHub Opportunities in the market segmentCustomer segment profile Case Study How can FIs help?Addressable needs © 2019 EYGM Limited. All Rights Reserved. ED None Contact Us: